Two former Arizona Department of Health Services inspectors are at the center of a bribery scandal after an undercover sting tied to an assisted living inspection in Carefree ended with their arrests this week. Authorities identified the former employees as Pearl Padilla and Dawn Rathburn and said the takedown followed an investigation led by the Arizona Attorney General’s Office.
Undercover operation and alleged payments
Court records obtained by 12News lay out a scheme that reads like something out of a crime script, only this one played out in a real Carefree facility.
According to those records, Padilla carried out an unannounced inspection at the assisted living home and found multiple deficiencies. Investigators say she then allegedly agreed to leave those problems out of the official paperwork in exchange for cash.
The court documents say the facility made a $2,000 down payment to Padilla during a meeting while an undercover agent was present, with a total of $7,500 allegedly promised once the final inspection report was submitted. Investigators say Padilla ultimately filed a report marking the facility “clear of deficiencies.”
Rathburn, according to investigators cited in the same records, admitted to being paid to help the facility pass its inspection.
State response and internal review
The Arizona Department of Health Services moved quickly to distance itself from the alleged conduct.
In a statement to 12News, the agency said it “has zero tolerance for fraud,” confirmed it cooperated with the Attorney General’s Office, and noted that Padilla and Rathburn are no longer employed by ADHS.
The department added that it is conducting an internal review to examine its policies and safeguards aimed at deterring misconduct and protecting the integrity of the state’s licensing system. As part of that effort, ADHS highlighted an email address where people can flag concerns: [email protected], according to the statement.
Why inspections matter
Licensing inspections and the survey results that come out of them are the backbone of oversight in assisted living and similar facilities. Regulators and families rely on those reports to spot red flags and keep vulnerable residents safe, so allegations that inspection findings were altered land like a direct hit on public trust.
The Arizona Department of Health Services publishes inspection histories and enforcement actions through its public AZ Care Check portal, allowing anyone to review a facility’s compliance record. Families who are uneasy about a provider can look up a facility’s licensing and survey history at AZ Care Check.
What happens next
Padilla and Rathburn were booked this week after the Arizona Attorney General's Office presented its findings to prosecutors. A formal charging decision is expected after prosecutors finish reviewing the court records.
It remains unclear whether any additional ADHS staff members or facility operators could also face charges, or when, exactly, charging documents will be filed. The Attorney General’s Office led the investigation and has not yet posted charging details on its public website.
